GBP/JPY retreats from highs, still holding above 147.00 handle

The GBP/JPY cross failed to build on early up-move and trimmed some of its strong gains back closer to near two-month highs touched on Friday.

The cross ran through some fresh offers near mid-147.00s amid weakening sentiment around the British Pound especially after last week's slew of UK data-disappointment, including Friday's dismal manufacturing and industrial production data. 

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However, an offered tone surrounding the Japanese Yen, led by Friday's BOJ government bond buying operation, which reinforced that the central bank would aggressively defend the 0% target for 10-year JGB yields, helped the cross to hold with minor gains just above the 147.00 handle.

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From a technical perspective, the cross has been struggling to decisively break through 147.50-60 hurdle and hence, it would be prudent to wait for a strong follow through buying interest before positioning for any additional near-term appreciating move.

Technical levels to watch

Weakness below the 147.00 handle could get extended towards 146.65-60 support, below which the cross is likely to accelerate the slide towards the 146.00 handle en-route the key 145.00 psychological mark.

On the flip side, sustained move beyond 147.50-60 strong hurdle has the potential to continue boosting the cross back towards yearly tops resistance near the 148.00-10 region.